Inflation is picking up -- slowly

Waiting for inflation to accelerate has been like watching grass grow --  it just seems even more interminable. Consumer prices, though, have edged up the past year and Federal Reserve officials are hoping the pace picks up enough to give them some ammunition to raise interest rates by December.

On the surface, it would seem that low prices are good for consumers. And they are, of course, at least for their daily pocketbooks.  But they’re also a sign of a sluggish economy and restrained wage gains. And persistently low inflation can lull shoppers into putting off purchases, curtailing economic growth. That’s why the Fed would like to see a pick up.

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Low oil prices and a strong dollar that cuts import costs have held down inflation since 2014. But since early this year, oil and gasoline prices have gradually climbed, pushing up overall inflation modestly. Meanwhile, rising restaurant prices have partly offset tame grocery bills.

Meanwhile, a weaker, and then stabilizing, greenback has helped nudge up both headline inflation and a core measure that strips out volatile food and energy items.

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Prices for other goods and services have been mixed. Rent, which has been rising sharply, has slowed recently. But airline fares probably rose last month as the impact from lower fuel costs waned, says Nomura economist Lewis Alexander.

All told, economists expect the Labor Department on Tuesday to report another solid increase in headline inflation in September, pushing the annual gain in the consumer price index to 1.5% from 1.1%. The core measure is expected to record a more restrained uptick, keeping the annual increase unchanged at 2.3%.